Many insurers and brokers are still failing to reveal they’re offering fair value to customers despite industry efforts to enhance governance and oversight regarding Guaranteed Asset Protection (GAP) products.
GAP insurance is an add-on to motor insurance and covers the difference between a vehicle’s purchase price and its current market value.
Earlier this 12 months, the FCA said its data showed that there had been cases where only 6% of the quantity customers paid in premiums was paid out in claims with some firms paying out as much as 70% of the worth of insurance premiums in commission to parties within the distribution chain, comparable to dealerships.
Because of this, firms offering the sort of insurance got a three-month ultimatum by the regulator in February to take immediate motion, or risk intervention. Some firms were allowed to resume offering GAP add-on sales in May.
In a brand new report, the Financial Conduct Authority (FCA) flags ongoing challenges particularly in information sharing between insurers and brokers, in addition to in accurately identifying goal markets.
This Article First Appeared At www.am-online.com
